The risk-free rate is 2% and the market risk premium is 3%. If stock A has...

The risk-free rate is 2% and the market risk premium is 3%. If stock A has a beta of -1.5, what is the stock's required rate of return?

Expert Solution

Based on CAPM,

Expected return = Risk free rate + Beta * Market risk premium

Expected return = 2% + (-1.5) * 3%

Expected return = 2% + (-7.5%) = -5.50%

jeff jeffy answered 2 years ago

The risk-free rate is 2.1% and the market risk premium is 5.5%. A stock has a...

The risk-free rate is 2.1% and the market risk premium is 5.5%. A stock has a beta of 1.1, what is its expected return of the stock? (Enter your answers as a percentage. For example, enter 8.43% instead of 0.0843.)

The risk-free rate is 1.27% and the market risk premium is 7.65%. A stock with a...

The risk-free rate is 1.27% and the market risk premium is 7.65%. A stock with a β of 1.34 just paid a dividend of $1.29. The dividend is expected to grow at 20.50% for three years and then grow at 4.96% forever. What is the value of the stock? The risk-free rate is 1.13% and the market risk premium is 9.58%. A stock with a β of 1.16 just paid a dividend of $1.86. The dividend is expected to grow...

The risk-free rate is 1.86% and the market risk premium is 7.72%. A stock with a...

The risk-free rate is 1.86% and the market risk premium is 7.72%. A stock with a β of 1.74 just paid a dividend of $2.78. The dividend is expected to grow at 22.07% for five years and then grow at 4.02% forever. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places.

The risk-free rate is 2.37% and the market risk premium is 6.39%. A stock with a...

The risk-free rate is 2.37% and the market risk premium is 6.39%. A stock with a β of 1.60 just paid a dividend of $2.67. The dividend is expected to grow at 21.99% for three years and then grow at 3.53% forever. What is the value of the stock? The answer is $48.21 but not sure how to get that answer. Please show the finance calculator steps if possible and not excel! Thanks

The risk-free rate is 1.25% and the market risk premium is 5.78%. A stock with a...

The risk-free rate is 1.25% and the market risk premium is 5.78%. A stock with a β of 0.84 just paid a dividend of $2.17. The dividend is expected to grow at 20.45% for three years and then grow at 4.90% forever. What is the value of the stock? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted Attempts Remaining: Infinity #2 The risk-free rate is 1.04% and the market risk premium is 8.82%. A stock with a...

The risk-free rate is 2.43% and the market risk premium is 8.12%. A stock with a...

The risk-free rate is 2.43% and the market risk premium is 8.12%. A stock with a β of 1.56 just paid a dividend of $1.36. The dividend is expected to grow at 23.91% for five years and then grow at 3.26% forever. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places.

The risk-free rate is 2.89% and the market risk premium is 7.59%. A stock with a...

The risk-free rate is 2.89% and the market risk premium is 7.59%. A stock with a β of 1.59 just paid a dividend of $2.55. The dividend is expected to grow at 23.34% for five years and then grow at 3.79% forever. What is the value of the stock?

The risk-free rate is 3.99% and the market risk premium is 5.45%. A stock with a...

The risk-free rate is 3.99% and the market risk premium is 5.45%. A stock with a β of 1.66 just paid a dividend of $1.69. The dividend is expected to grow at 22.79% for three years and then grow at 4.25% forever. What is the value of the stock? round to 2 decimals

The risk-free rate is 1.15% and the market risk premium is 6.74%. A stock with a...

The risk-free rate is 1.15% and the market risk premium is 6.74%. A stock with a β of 1.31 just paid a dividend of $1.40. The dividend is expected to grow at 22.68% for three years and then grow at 4.35% forever. What is the value of the stock?

The risk-free rate is 2.11% and the market risk premium is 7.99%. A stock with a...

The risk-free rate is 2.11% and the market risk premium is 7.99%. A stock with a β of 1.30 just paid a dividend of $1.78. The dividend is expected to grow at 21.58% for three years and then grow at 3.74% forever. What is the value of the stock?

Question